Marshall Aid

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Marshall Aid

On 5 June 1947, George C. Marshall, the U.S. secretary of state, painting a grim picture of the conditions prevailing in post–World War II Europe, offered financial aid, technical assistance, and economic advice to European countries. Nations that accepted the offer would have to produce a joint plan of their needs; in this way, Europe would cooperate and recover along democratic, capitalist lines. Ireland was one of the sixteen countries that accepted the invitation to participate in the European Recovery Programme (ERP), also known as the Marshall Plan.

Ireland's inclusion in the ERP was surprising because its wartime policy of neutrality still rankled in the U.S. State Department, the White House, and Congress. On the other hand, the United States could not afford to omit Ireland, because of its strategic importance to U.S. and British security and its role as an exporter of food to Britain. More importantly, excluding Ireland would have been contrary to the U.S. aim of uniting Europe. The United States did illustrate its disapprobation, though, by awarding Ireland only $128.2 million in loans and $18 million in grants between 1948 and 1952, representing the second-smallest grant awarded to any of the ERP countries.

The job of using the dollars began in September 1948 when officials from the Economic Cooperation Administration (ECA), the U.S. body that supervised the Marshall Plan, arrived in Ireland. The ECA's economic plans for Ireland initially focused on encouraging farmers and officials in the Irish Department of Agriculture to develop the sector along more modern, efficient lines. But beginning in 1949, when it became clear that dollar shortages would continue past 1952 when ERP funding was to end, the ECA prioritized the development of the industrial sector—which could export to dollar markets—and the tourism industry. Along with spreading the messages of growth, productivity, and modernization, ECA officials oversaw the utilization of ERP-funded raw materials and goods, the establishment of the technical-assistance program, and distribution of grant funds for research, development, and educational projects that benefited the economy.

In the short term the ERP did not result in economic prosperity in Ireland. But it funded essential imports and capital projects, encouraged economic planning in the government administration, and exposed industry officials, workers, and business managers and owners to modernizing forces that could not be ignored in the long term.